Russia’S State Budget In January–July 2013

According to the Federal Treasury’s estimates, the volume of federal budget revenue over the first 7 months of 2013 dropped by 2.2 p.p. of GDP on the corresponding period of 2012. As a positive fact, it can be noted that the rate of decline in the volume of federal budget expenditure as a share of GDP over the five recent months of 2013 against its levels recorded over the corresponding periods of last year has not been accelerating, being stable at the level of 2.1–2.2 p.p. of GDP. At the same time, the situation with regard to the dynamics of revenue of the consolidated budget of RF subjects has been aggravating: while the results of the first three months of 2013 pointed to its decline by 1.8 p.p. of GDP on January–March of last year, the volume of revenue for the period of January–July 2013 dropped still further – to 2.1 p.p. of GDP on the first six months of 2012. Thus, the mediumterm risks for the Russian budgetary system’s sustainability will depend on the ability of the consolidated budgets of RF subjects to remain well-balanced, as well as on the regions’ ability to provide financing for their assumed obligations without drawing on additional allocations from the federal budget.